What I Saw in Davos: Middle Powers Rise and Trump’s Shadow Looms

Michael Froman is president of the Council on Foreign Relations.

Greetings from Davos, home of the World Economic Forum, where I am pleased to report that globalization is alive and well—at least from the perspective of the middle powers and the Global South.

A walk down the Promenade, Davos’ main street, offers a snapshot of key geopolitical and economic trends. Normally filled with ski shops and cafes, the thoroughfare has been transformed into a long line of sleek booths and lodges sponsored by countries and multinational corporations. Gone are the Russian pavilions from years past. Ukraine House, however, is a source of constant buzz, and not just when Volodymyr Zelenskyy was there.

Chinese firms, though still central players in the global economy, are scarce. Perhaps they are hiding their strength and biding their time amid the potential for a new wave of protectionism in Europe and the United States. Or perhaps they don’t need to show their wares in the Alps to continue surging ahead in clean energy, automobile manufacturing, and other sectors.

This year, the street is replete with representation from emerging economies and developing countries, from Brazil to Indonesia. Even Mongolia is here. Each has a state-sponsored installation, filled with booths from national champion firms and staff who eagerly hand out cultural delicacies to passersby.

The new economic and political realities in the Middle East are particularly evident. The Gulf powers’ installations spared no expense. Saudi Arabia’s display of its megaproject, Neom, stood out. Iraq’s semi-autonomous Kurdistan region has a building all to itself and a popular tea stand.

India has several outposts, some sporting its newly in vogue name, Bharat, and others sponsored by one or another Indian state. Indian companies are also well represented, from Wipro and Infosys to Tata and Tech Mahindra. But there is little of the triumphalism that characterized India’s presence just a year ago, before Prime Minister Narendra Modi’s electoral setback, when the country seemed to be on top of the world.

Europe? Davos started as a European management retreat. Now, almost no European country has made an effort to demonstrate their presence. Belgium has a pavilion and hosted a rollicking dance party. Poland has a small installation set back from the Promenade.

And the United States? There is a USA House, but it is hardly an official outpost. Evidently sponsored by some crypto investors, it looks positively dystopian from the outside, with modernist rendering of eagles and a rocket ship.

In general, there seem to be fewer government leaders on hand. German Chancellor Olaf Scholz made a brief appearance, as did Chinese Vice Premier Ding Xuexiang. Argentine President Javier Milei captivated and terrified the crowd, and there was a smattering of royalty and heads of government from smaller countries.

The nongovernmental organizations and development activists who once set the tone for much of Davos played a relatively low-key role. The balance of this multistakeholder gathering has shifted decisively in the direction of the private sector.

As for U.S. companies, Davos has at times been a bellwether of bubbles. A few years ago, it was all about the metaverse. No more. A couple years ago, crypto firms seemed to have taken over every other venue on the Promenade, including a church, but today, they are down to a few, and mostly the more established players, not start-ups. Indeed, most of the U.S. companies represented are the hardy perennials—the hyperscalers, IBM, Qualcomm, Cisco, Salesforce—plus, of course, the usual array of financial services and consulting firms.

But if most of the energy on the Promenade is being driven by middle powers and the Global South, participants here have only one country and one person on their mind: the United States and Donald Trump. That is all anyone wants to talk about.

There has been a marked shift in the Davos crowd’s disposition toward Trump. Eight years ago, he was an anathema to the proudly globalist attendees who sought refuge in the Alps. This year, the attitude toward him is neither defiant nor distraught; it is pragmatic.

If you’re the CEO of a large American firm, you have made peace with the elements of Trump’s policies you don’t like (tariffs, immigration restrictions) and given greater weight to the ones you do (lower taxes, less regulation). Clearly, there is also a palpable fear of retribution and a desire to stay off Trump’s radar screen.

Some of the participants appear to be in denial, or at least indulging in wishful thinking. They look for any signal to confirm their preferences. “President Trump said he was going to impose tariffs on Day 1 and didn’t? Maybe he’s not serious about tariffs after all.” But by Day 4, Thursday, that sort of wishful thinking got a dose of cold water when Trump appeared by video. He gave the attendees, particularly the Europeans, a piece of his mind, noting the sorry situation of Europe’s regulatory state.

Indeed, one of the themes that has emerged here is the divergence between the optimism about the U.S. economy and the pessimism about Europe, with the rest of the world falling somewhere in between. There is bullishness about Southeast Asia and the Middle East, but continued concern about China.

In my conversations with government and business leaders throughout the week, there was a growing recognition that Trump has entered office with significant political capital: the popular vote, Republican control of both houses of Congress, and a staunchly loyal cabinet and cadre of top advisers. This is his moment. He has everyone’s attention, and nation states and business leaders are eager to cut deals with him. The question is on what terms.

With the first day of the conference overlapping with inauguration, quite understandably no senior representative from the Trump administration came to Davos. Still, the Trump effect is certainly felt. Climate change, the UN Sustainable Development Goals, stakeholder capitalism—these concepts, once core pillars of the Davos agenda, are no longer at the forefront.

The same is true for the spirit of multilateralism. There is little faith that global institutions will be the most effective forums for engaging with the new administration in Washington. Instead, personal relations, bilateral contacts, and coalitions of the able are the order to the day.

It will be interesting to see who from the Trump administration attends next year, taking the president’s vision of world order to the belly of the globalist beast. I sense that such an emissary would be welcome. At Davos, as in so many other forums, the United States remains the indispensable nation.

As one American tech CEO aptly summed up, waiting in line to get through security, “This year is different. There’s less power in the air.”